Netflix - I Hope You Like Catching Knives

NASDAQ:NFLX   Netflix, Inc.
Netflix is that $200 billion company trading at $441.44 that everyone seem to have forgot about, even though it more than doubled in a year.

Personally, I think these streaming services are a colossal waste of your time and money. What you're watching is the intellectual equivalent of a Big Mac or a bag of potato chips, and permeated with the things of socialism and atheism.

And Netflix is really quite woke and some of the content is unforgivably degenerate.

You shouldn't look at warped mirrors and shouldn't cast your eyes on ugly things, or they'll twist your heart and your soul.

When it comes to the markets-at-large, I believe we're definitely going to see a correction, rather than a new all time high, which I detail in the two calls below:

Nasdaq NQ - A Fundamental and Technical Warning Signal

SPX/ES - An Analysis Of The 'JPM Collar'

If there's to be a new all time high, let's wait and see what Q4 has in store for us.

There's a lot of geopolitical risk in the markets right now. The War between the Russian Federation and NATO via Ukraine is a big one, and a bigger one is the situation in Mainland China with Xi Jinping and the Chinese Communist Party.

More or less, I believe the globalists want to topple the Party to have their men from Taiwan go in and take control of China and depose Xi.

But I believe Xi is likely to topple the Party himself before that can happen.

Big gaps will come that day and things will be very hard because Wall Street won't be in any kind of a risk-on mood.

The 24-year persecution against Falun Dafa launched by former Chairman Jiang Zemin and the Shanghai toad faction is something Xi can weaponize to implicate the entire world.

Because to do business in Shanghai you've needed the Jiang Faction's approval. To get its approval, you've had to dirty your hands in the persecution and swear vows to the Flag of Blood.

And unfortunately, most of the world has wanted what the Party has. Read the story of British billionaire Neil Heywood, who decided to court Jiang's minion Bo Xilai.

Bo told Heywood that to prove his loyalty he had to divorce his wife. Heywood refused, and so Bo's wife poisoned him.

Heywood died in 2011.

Bo Xilai was ruined in Xi's Anti-corruption Campaign in 2013, stripped of all his assets, and sentenced to life in prison in a CCP dungeon.

Gambling with the Party is one foot in the grave and the other in prison. Live a virtuous life instead.

Moreover, they always say zoom out. Looking at Netflix on the yearly, it's hard to say you're not in the crosshairs of a savage trend reversal.

And you can see these daily bars far more clearly on the weekly chart:

There might be that fat gap above that you have your eye on, but you're dealing with a very long and very steep ramp in the first place, and this is in a stock which stayed away from a true gap between April and August of '22.

Another notable factor is that the FINRA short volume for Netflix, while still notably low, is the highest it's been in three months and posted its first green month since April and only its second of '23.

Short volume

This is quite notable in light of the fact that June was one of the best months for equities in a long time

Netflix doesn't have an ETF, except for a 3x levered ETF on the Mexico exchange. Insignificant except for it fell from 5 pesos to 5 pennies.

What's sad is even if it Netflix was to fall 50% in value the thing would still only be worth like 30 cents. % base levered ETFs will kill you.

So, here's the call.

Netflix printed a proper daily pivot in mid June (you'll have to look yourself because I can't zoom the chart in for the post) and has been flirting inside that range ever since.

If she makes a new high I suppose then it's time for more uppy and you can buy calls at the top and feel pretty good.

But if she breaks the $420 range the next area to watch is the June low, which Netflix printed on a green candle and on the first day of the month at $393

After that, things might happen and happen fast.

If bearish momentum and level breaking manifests, then where I believe it will return to is the $180 to $160 range.

For Netflix to have a chance to return above $500, it will have to hold the $162.71 bottom.

If you can catch that falling knife you'll feel pretty smart if you can hold the bag for a few months.

But if you try to go long before the bottom you'll cut your hands and cut your hands some more.
Well, Netflix did take out the high.

But this gappy dump to take out the July 1 low is pretty confirmation that the top is in and it's a short now.

I think we see a Nasdaq bounce ahead still, though, to be honest. It might be very short lived, but we'll see it.
Netflix doing a partial gap fill this morning while the Nasdaq looks pretty bad.

All good signs for the bear thesis.

NVDIA and TSLA looking like clones of each other on the 1 minute candles too

Except Tesla now has more strength.
Netflix a fine red candle to start the session, but somehow finding itself support.

Perhaps she double bottoms and then does $444 again, since it means death in Chinese, lol.
Personally, I'm looking to see if the rally can break down and fail with a target of this double bottom hourly at $430.

It's important to note that Netflix balanced the gap Monday/Tuesday:

And with it dumping some $36 on earnings, may no longer be a long.
So, because this is a huge blow out and price rebalance the gap (above the white line), this price action should be considered at least a short-term shift into a bearish market structure.

Which means if you go long to buy the dip because you've been conditioned to do so you may get hurt.

A lucky move for bears would be a gap rebalance ~$450 before it takes the $430~ double bottom.
Netflix finally raids the double bottom, indicating the MMs now seek downside targets.

Could retrace and fill the entire gap before it's time for more down though.
The fact that Netflix has been a total dog since taking the double bottom last week indicates this may have topped and is now a dangerous long.

Where to short if there's no retrace? Well, that's the hard part.

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